FINANCIAL PERFORMANCE HIGHLIGHTS Revenue +29% R12.4 billion from - - PowerPoint PPT Presentation

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FINANCIAL PERFORMANCE HIGHLIGHTS

Revenue +29% R12.4 billion from continuing operations Normalised headline earnings +29% R2.4 billion from continuing operations Normalised diluted headline earnings per share +20% 523.3 cents from continuing operations Capital distribution to shareholders +50% 105.0 cents

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GROWTH RECORD SINCE LISTING

from Continuing Operations

73 353 936 1,104 1,561 1,890 2,202 2,815 3,449 4,026 4,682 8,441 9,619 12,383 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Growth in Revenue since Listing CAGR = Revenue 48%

R'millions

14 72 211 300 416 501 632 833 987 1,198 1,314 2,269 2,633 3,411 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* 2011*

Growth in EBITA since Listing CAGR = EBITA 53%

R'millions R'millions

* 2010 and 2011 EBITA are normalised EBITA

4 17 26 47 63 79 104 138 185 210 226 378 456 544 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* 2011*

Growth in HEPS since Listing CAGR = HEPS 46%

Cents per Share

* 2010 and 2011 HEPS are normalised HEPS

4 Year Ended 30 June 2010 R million Year Ended 30 June 2011 R million % Change

ABRIDGED INCOME STATEMENT

Continuing Operations Revenue 12 383 9 619 +29% Gross profit 5 614 4 476 +25% Net operating expenses (2 322) (1 851) EBITA 3 292 2 625 +25% Amortisation (143) (101) Operating profit 3 149 2 524 +25% Net funding costs (412) (365) Share of after tax loss of associates

• (2)

Profit before tax 2 737 2 157 +27% Tax (582) (458) Profit after tax from continuing operations 2 155 1 699 +27% Profit after tax from discontinued operations 434 280 Profit for the year 2 589 1 979 +31% EPS 595.5 cents 494.9 cents +20%

5 Unadjusted Year Ended 30 June 2011 R million Year Ended 30 June 2010 R million Year Ended 30 June 2011 R million % Change

ADJUSTED INCOME STATEMENT

CONTINUING OPERATIONS Revenue 12 383 12 383 9 619 +29% Gross profit 5 614 5 614 4 476 +25% Net operating expenses (2 322) (2 126) (1 739) EBITA 3 292 3 488 2 737 +27% Amortisation (143) (143) (101) Operating profit 3 149 3 345 2 636 +27% Net funding costs (412) (376) (356) Share of after tax loss of associates

• (2)

Profit before tax 2 737 2 969 2 278 +30% Tax (582) (602) (457) Profit after tax 2 155 2 367 1 821 +30% Normalised HEPS 544.3 cents 455.7 cents +19% Diluted normalised HEPS 523.3 cents 437.7 cents +20%

*

* Adjusted for headline earnings adjustments and to add back transaction and restructuring costs

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BENCHMARKING PERFORMANCE EXPECTATIONS

CONTINUING DISCONTINUED TOTAL R millions R millions R millions Revenue 12 383 494 12 877 Normalised operating profit 3 268 58 3 326 Normalised headline earnings 2 357 44 2 401 Normalised headline earnings per share 544 cents 10 cents 554 cents Diluted normalised headline earnings per share 523 cents 10 cents 533 cents

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DISCONTINUED OPERATIONS BY BUSINESS SEGMENT

SA SSA INTERNATIONAL TOTAL

R millions R millions R millions R millions

Discontinued revenue 67

• 427

494 Discontinued normalised operating profit 2

• 56

58 Discontinued normalised headline earnings 1

• 43

44

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REVENUE FROM CONTINUING OPERATIONS

1000 2000 3000 4000 5000 6000 SA Pharma SA Consumer Sub-Saharan Africa Asia Pacific Latin America Rest of the World

2010 2011

According to Customer Geography

+15% +3% +43% +122% +19% +12% R millions

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GROUP OPERATING MARGIN

26.9% 27.2% 27.1% 26.4% 20% 21% 22% 23% 24% 25% 26% 27% 28% 29% 30% 2008 2009 2010 2011

Based on Gross Revenue and Adjusted Operating Profit Operating margin generally stable

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REGIONAL PERFORMANCE : SOUTH AFRICAN BUSINESS

48%

2011

Gross Revenue

55%

2010

55%

2011

60%

2010

Adjusted Operating Profit

4,309 5,575 6,296 2009 2010 2011

Gross Revenue

R millions +29% +13% 1,102 1,639 1,934 2009 2010 2011

Adjusted Operating Profit

R millions +49% +18% 25.6% 29.4% 30.7% 2009 2010 2011

Operating Margin

based on Gross Revenue and Adjusted Operating Profit

from Continuing Operations

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REGIONAL PERFORMANCE : SUB-SAHARAN AFRICA

10%

2011

Gross Revenue

9%

2010

5%

2011

3%

2010

Adjusted Operating Profit

931 910 1,301 2009 2010 2011

Gross Revenue

R millions

• 2%

+43% 178 72 177 2009 2010 2011

Adjusted Operating Profit

R millions

• 60%

+145% 19.2% 7.9% 13.6% 2009 2010 2011

Operating Margin

based on Gross Revenue and Adjusted Operating Profit

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REGIONAL PERFORMANCE : INTERNATIONAL

42%

2011

Gross Revenue

36%

2010

40%

2011

37%

2010

Adjusted Operating Profit

3,201 3,603 5,617 2009 2010 2011

Gross Revenue

R millions +13% +56% 1,014 1,023 1,377 2009 2010 2011

Adjusted Operating Profit

R millions +1% +35% 31.7% 28.4% 24.5% 2009 2010 2011

Operating Margin

based on Gross Revenue and Adjusted Operating Profit

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DISPOSALS & OTHER DISCONTINUED BUSINESSES

• Onco Laboratories Limited
• Disposed of with effect from 1 February 2011
• Proceeds of R602 million
• Profit on disposal of R368 million
• Balance of Co-pharma Limited
• Disposed of with effect from 1 July 2010
• Proceeds of R26 million
• Profit on disposal of R7 million
• Products acquired from GSK for territories of India, Pakistan, Bangladesh, Sri Lanka and

Afghanistan

• Disposed of with effect from 1 June 2011
• Proceeds of R115 million
• Neutral profit
• Campos facility and related hospital products in Brazil
• Disposal completed 1 July 2011
• Classified as “Held for sale”
• Proceeds of approximately R450 million
• Personal care brands
• Various completed disposals
• Includes Playboy, Vinolia and Formule Naturelle
• Proceeds of R38 million
• Toothpaste brands agreement signed last week
• Classified as “Held for sale”
• Proceeds of R70 million plus stock

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OPERATING CASH FLOWS

2011 Rm 2010 Rm Change Cash operating profit 3 845 3 269 Changes in working capital (463) (344) Cash generated from operations 3 382 2 925 Net finance costs paid (401) (427) Tax paid (535) (465) Cash generated from operations 2 446 2 033 +20% Normalised operating cash flow per share from continuing

• perations

580.8 cents 473.0 cents +23% Operating profit to cash flow conversion rate 107% 104% Working capital as a percentage of Revenue* * annualised 22.5% 25.3% Discontinued operations (44) (138) Normalisation adjustments 112 6 Normalised cash generated from continuing operations 2514 1 901 +32%

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ABRIDGED BALANCE SHEET

Year Ended June 2011 Year Ended June 2010 R'm R'm Assets Non-current assets 17 423 12 178 Tangible fixed assets 3 652 3 012 Goodwill 4 627 456 Intangible assets 8 917 8 610 Other non-current assets 227 100 Current assets 6 335 4 683 Cash 3 039 2 940 26 797 19 801 Equity and Liabilities Capital and reserves 13 287 10 886 Non-current liabilities 5 302 3 086 Preference shares-liability 381 387 Long term interest bearing debt 4 249 2 260 Other non-current liabilities 672 439 Short term interest bearing debt 5 138 3 720 Other current liabilities 3 070 2 109 26 797 19 801

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INVESTMENT IN PROPERTY PLANT & EQUIPMENT

More than R2.5 billion in 5 years

R’ million 289 382 630 636 651

2007 2008 2009 2010 2011

60 75 119 168 215

100 200 300 400 500 600 700

Depreciation Capital Expenditure

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DEBT & LIQUIDITY TRENDS

60% 40% 48% 52%

Equity Debt

76% 24% 66% 34%

R'millions 709 652 1,292 2,033 2,446 977 2,011 4,432 3,428 6,729 2007 2008 2009 2010 2011

Net cash flow from operating activities Net debt

71% 29%

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BORROWINGS ARRANGEMENTS

New arrangements have been agreed in principle with our funders Agreements due to be signed by end of the month

• 3 separate “debt pools” independent of one

another

• Unsecured funding
• Holding company guarantee only in regional

debt pool SA / SSA R3.5 billion

International R1.8 billion Asia Pacific R1.0 billion

Total R6.3 billion

Each region is able to access and raise its own debt independently. Blended cost of finance approximately 7%, variable with LIBOR, JIBAR etc.

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SIGMA ACQUISITION

• Completed on 31 January 2011
• Purchase consideration reduced from AUD900 million to AUD863 million (R6.1 billion)
• Based on value of take-on of working capital
• Cash outflow reduced by further R169 million due to favourable cash flow hedge
• Detailed exercise conducted to fairly value assets and liabilities acquired
• Goodwill of R4.0 billion
• Benefits of consolidation
• Expected savings in cost of goods
• Integration plan almost complete and successful beyond expectations

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SIGMA ACQUISITION

• Asia Pacific will be reported as a separate region in the forthcoming year
• 2011 Revenue : R3.0 billion
• 2011 Adjusted operating profit : R0.6 billion

WE SAID WE DID

• HEPS close to neutral
• Transaction and restructuring

costs of more than R100 million likely

• Net debt of approximately

R7 billion

• Gearing of 35% - 40%

 HEPS positive Transaction and restructuring cost of R136 million  Net debt of R6.7 billion  Gearing of 34%

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DISTRIBUTION OF FUND MANAGERS

South Africa 38% North America 35% Middle East 1% Asia Pacific 3% Europe 23%

As at December 2010

South Africa 44% North America 29% Middle East 0.4% Asia Pacific 2% Europe 25%

As at June 2010

South Africa 54% North America 23% Middle East 1% Asia Pacific 3% Europe 19%

As at June 2011

The Bokke are back!

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ASPEN ~ OUR HISTORY SO FAR

• From start up in 1996 to largest pharma company in South African market
• Number 1 in public and private market
• 1 in 4 scripts dispensed is for Aspen medicine
• Largest in Sub-Saharan Africa
• Collaboration number 1 pharma company in Sub-Saharan Africa
• Number 1 generic player across East Africa
• From a 2001 start up operation in Australia
• Number 1 by scripts dispensed
• Sales of R15 million per day
• 13 years of unbroken growth
• From zero to R10 million per day of operating profit
• Globally now a top 10 generic player
• Largest generic manufacturer in the southern hemisphere
• Competitive even against Asians
• First accreditation by FDA of tentatively approved generic ARV
• Beat all other global competitors
• Responsible for about 1 million African lives
• Our CSI touches over 800 000 lives

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ASPEN’S FOCUS

• Aspen legacy in South Africa stretches back to 1850 and to the original Lennon brand
• Aspen’s business has evolved globally over the past decade – now the leading generic

manufacturer in the southern hemisphere

• To achieve our objectives for quality, affordable healthcare primarily into the emerging

markets, we have and are focussing on

• Significant upgrade of manufacturing capability, quality and capacity
• Economies of scale
• Establishing representation and distribution platforms across emerging markets
• Establishing partnerships with both multinationals and Asian developers / manufacturers
• Selecting management teams that are decisive and entrepreneurial
• Centralised bureaucracy has no place here!
• To rest is to rust

Is Aspen targeting the right market segments? Quality Affordable Medicine for All

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SPENDING GROWTH FELL BY $20 BILLION IN 2010, MOSTLY OCCURRING IN THE DEVELOPED MARKETS

IMS Global Market Prognosis

Global Growth : 2002 - 2010

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PHARMERGING MARKETS AND GENERICS ARE THE ONLY DRIVERS OF GROWTH

Components of Change in Total Spending

IMS Global Market Prognosis

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AN ACCELERATED SHIFT IN SPENDING ON GENERICS IS EXPECTED

IMS Global Market Prognosis

Spending by Segment

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IN PHARMERGING MARKETS GROWTH IS MOSTLY FROM GENERIC DRUGS

*

• Argentina, Venezuela, Mexico, Vietnam, Indonesia, Thailand, Pakistan, Egypt, Poland, South Africa, Romania & Turkey

Pharmerging Spending and Growth

IMS Global Market Prognosis

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ASPEN IN THE SOUTH AFRICAN MARKET

MAT Share Value

16.8 16.9 17.0 17.1 17.1 17.1 17.1 17.1 17.0 17.0 16.8 16.8 16.6 10.0 10.0 9.9 9.9 9.9 9.9 10.0 9.9 9.9 9.8 9.8 9.7 9.7 7.6 7.6 7.6 7.6 7.5 7.5 7.5 7.5 7.6 7.6 7.7 7.5 7.7 6.9 6.8 6.8 6.7 6.7 6.7 6.6 6.6 6.6 6.5 6.4 6.4 6.4 4.9 5.0 5.0 5.1 5.1 5.1 5.1 5.1 5.2 5.3 5.3 5.2 5.2 4.0 4.0 4.0 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 4.0 4.0 3.8 3.8 3.7 3.7 3.7 3.7 3.7 3.7 3.6 3.6 3.6 3.6 3.7

• 2.0

4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11

Aspen Adcock Ingram Sanofi Pfizer Novartis Cipla Medpro AstraZeneca Merck & Co Johnson & Johnson Roche

Percentage share of the market

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ASPEN IN THE SOUTH AFRICAN MARKET

The March 2011 Campbell Belman Confidence Predictor showed Aspen as the leading pharmaceutical company in South Africa 2011 2010 2009 Pharmacy 1 1 2 Managed Healthcare Providers 1 1 5 Managed Healthcare Funders 1 1 5

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ASPEN IN THE SOUTH AFRICAN MARKET

Campbell Belman Results Peer Review – December 2010

Campbell Belman research conducted amongst 138 Asset Managers, 58 Analysts and 12 Members of the Financial Media

10 20 30 40 50 60 70 80

ASPEN ADCOCK CIPLA

Is financially sound & secure Has a strong cash flow Has clearly defined

• bjective/strategy

Is a well managed company Is reputable, honest and trustworthy Believes in full disclosure Makes effective use of capital

• Co. reports reflect
• co. performance

Has inherently strong products/services Alert to new ideas for profitability Has an effective chief executive Has a clear edge

• ver its competitors

Is financially sound & secure

• Co. reports reflect
• Co. performance

Has strong cash flow Is reputable, honest & trustworthy Has clearly defined

• bjective/strategy

Is a well managed company Believes in full disclosure Communicates well with investors Makes effective use of capital Has inherently strong products/services Alert to new ideas for profitability Has an effective Chief Executive

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ASPEN IN THE SOUTH AFRICAN MARKET

Campbell Belman Results Peer Review – December 2010 continued

Campbell Belman research conducted amongst 138 Asset Managers, 58 Analysts and 12 Members of the Financial Media

10 20 30 40 50 60 70

ASPEN ADCOCK CIPLA

Feel confident in its long term future Chief executive is a straight talker Has a clear edge Over its competitors Senior management accessible Strong growth potential Maintains balance between risk & return Company results match expectations Has good relationships with government Practices csr without detracting appeal Has a good record

• f labour relations

Quality of its people impressive Has excellent investor relations

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REPORTING BACK ON THE CHALLENGES RAISED AT THE INTERIM RESULTS

• Legislation
• Logistics fees and international benchmarking
• No SEP increase
• Patent expiries : Seretide and Truvada
• Loss of Pfizer infant milk license
• ARV public sector margin and

volume losses

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LEGISLATION

• Impact on originator products
• Comprehensive submission from PTG
• Focus is on access
• Significant industry push back
• Impact still uncertain
• Shared with GSK
• Unlikely to be material to Aspen
• Regulator has conceded quantum is low and has withdrawn and intends re-issuing the

Gazette

Too early to comment on likely outcomes Aspen does not anticipate significant downside

Extract figure 10.1 from the Government Gazette Page 60 – 17 December 2010

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LEGISLATIVE CHALLENGES

• Currency impact
• Local CPI factors
• Currency risk
• FECs provide some relief
• Volume growth to drive sales
• Margin percentage still effected, but absolute margin can be protected
• Facility costs
• Increased local volume
• Shift of international volumes to South Africa
• Assessing movement away from Eskom to solar – feasibility being performed
• SEP is a currency roller coaster
• The Rand’s relative strength will continue to influence local producers’ versus importers’ competitiveness

No SEP Increase – Margin Pressure for Local Producers In spite of above challenges, volume increases, efficiencies & cost containment will maintain margins

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PATENT EXPIRATION OF TRUVADA / SERETIDE

2011 Sales : R150 million 2012 Forecast sales : R50 million Most sales lost to launch of Atripla

• First once a day three in one regimen
• Sales also lost to generics

Aspen generic forecast to sell R40 million Awaiting registration of generic triple combination 2011 Sales : R150 million Stellar performance of brand defence Unit share of Seretide post patent and Foxair > Seretide pre patent Value also inclining, gap nearly closed

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SERETIDE & FOXAIR UNIT PERFORMANCE

10,000 20,000 30,000 40,000 50,000 60,000 July August September October November December January February March April May June FOXAIR SEREFLO HFA SERETIDE SERETIDE & FOXAIR SERETIDE PY AVE

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SERETIDE & FOXAIR VALUE PERFORMANCE

2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 July August September October November December January February March April May June FOXAIR SEREFLO HFA SERETIDE SERETIDE & FOXAIR SERETIDE PY AVE

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ANTIRETROVIRALS (ARVs)

• How much do ARVs costs?
• Triple combinations cost R50 - R100 per person per month
• The ARV cost for
• 1 million people on treatment therefore cost government about

R1 billion

• Estimated lives on treatment is 1.3 million with a intention to double
• CD4 count now lowered
• In last 4 months ARV turnover has slumped to 30% -50% of that anticipated
• Significant receipts of donor funded stock
• Last PEPFAR orders
• Government intimated situation will normalise within a few months
• Profits are slim and real value for Aspen is in the recovery of overheads in the manufacturing facility
• Impact on sales material particularly H1
• South African sales growth a challenge (H1  H2 )
• Key issues for Aspen is not margin loss, but facility structured for volumes forecast
• If volumes follow as promised – no issues
• If not, restructure needed to take out about R3 million per month of volume related costs

Material negative impact on sales line – particularly H1 Potential operational disruption – greatest challenge

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IN DEFENCE OF OUR INFANT MILK FORMULA BUSINESS

• Pfizer license lost
• Sales R250 million
• Aspen has its own brand Infacare
• Infacare is larger than the Pfizer brand in South Africa
• Infacare Gold range launched
• Manufacturing / formulation expertise
• Making strong in-roads into premium market
• Aspen has much spare local capacity
• Capacity enhancement post the explosion
• Elected not to make the Pfizer brand
• Aspen opted rather to tender
• Competitors Abbott / Nestle
• 3 year tender was successful beyond all expectations
• Awarded 100% of 7 material tender items
• Value being ascertained
• Sales to start October
• Annualised sales and margin anticipated to cover entire Pfizer gap
• Largest impact H2

Succeeded beyond expectations – next step – going global!

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ASPEN & THE SOUTH AFRICAN MARKET

Market Performance

Other R0.68bn (R0.64bn) Ethical/Branded R11.76bn (R11.46bn) Generics R5.16bn (R4.57bn) OTC R5.92bn (R5.47bn)

Units growth 2.44% (7.08%) – driven by generic volume growth

Total Private Market as at June 2011 R23.52bn (June 2010: R22.14bn)

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ASPEN & THE SOUTH AFRICAN MARKET

MAT Market Growth – July 2010 – June 2011

10.7 9.6 8.9 9.8 8.9 8.4 8.4 10.0 9.7 8.6 4.7 6.3 9.5 8.5 7.9 8.8 7.7 6.9 6.7 7.7 6.9 5.6 0.8 2.6 14.5 13.5 12.8 13.6 13.0 12.9 13.3 15.3 15.4 14.2 11.1 13.1 11.4 10.2 9.0 10.1 8.8 8.8 9.0 11.1 11.4 10.7 7.4 8.1 2 4 6 8 10 12 14 16 18 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11

MARKET ETHICAL GENERIC OTC

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ASPEN & THE SOUTH AFRICAN MARKET

Total Aspen & Portfolio MAT Growth - July 2010 – June 2011

13.0 13.2 12.9 13.1 12.2 11.3 12.3 12.3 11.9 9.3 5.2 5.2 18.6 18.8 18.2 18.3 15.4 13.0 12.7 11.0 9.2 5.2

• 1.7
• 4.1

11.6 12.9 13.6 14.3 14.3 14.6 17.1 17.8 18.1 15.3 11.7 13.6 13.0 11.3 10.5 8.9 8.0 7.0 7.7 8.6 8.3 6.7 4.8 5.1

• 10.0
• 5.0

0.0 5.0 10.0 15.0 20.0 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11

MARKET ETHICAL GENERIC OTC Outpacing the market generically Seretide Truvada effect

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ASPEN & THE SOUTH AFRICAN MARKET

MAT Value Share of the Generics Market June 2011 : R5.16bn (June 2010 : R4.57bn)

Aspen 31% Cipla Medpro 16% Adcock Ingram 10% Other 10% Novartis 9% Daiichi Sankyo 5% Servier 4% Lupin 4% Sanofi Aventis 3% Mylan 2% Pfizer 2% Pharmaplan 2% Ranbaxy 1% Dr Reddys 1%

44

ASPEN & THE SOUTH AFRICAN MARKET

Ethical vs Generic Split – MAT Value Share

28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 29% 29% 29% 29% 29% 29% 29% 29% 30% 30% 30% 31% 72% 72% 72% 72% 72% 72% 72% 72% 72% 72% 72% 72% 72% 71% 71% 71% 71% 71% 71% 71% 71% 70% 70% 70% 69%

GENERIC ETHICAL

Percentage

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ASPEN & THE SOUTH AFRICAN MARKET

Ethical vs Generic Split – MAT Counting Unit Share

Generics have a 61% volume share but 31% value share

58% 58% 58% 58% 59% 59% 59% 59% 59% 59% 59% 59% 59% 59% 59% 60% 60% 60% 60% 60% 60% 61% 61% 61% 61% 42% 42% 42% 42% 41% 41% 41% 41% 41% 41% 41% 41% 41% 41% 41% 40% 40% 40% 40% 40% 40% 39% 39% 39% 39%

GENERIC ETHICAL

Percentage

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IMS ~ BRAND CLASSIFICATION CRITERIA

Ethicals / Branded Generics OTC Nutritionals Vaccines Excluded

Products that are / were patent protected Schedule 3-7 products that were never patent protected Dual / second brands also included here Schedule 0-2 products Unscheduled and proprietary brands Infant milk formula Vaccines Diagnostics / Devices / Hospital solutions Reclassification can effect individual market sectors. However the total shares are not effected and trends in the individual market sector have been adjusted retrospectively.

47

FURTHER FACTORS FOR CONSIDERATION IN SOUTH AFRICA

• Patent losses aside, Aspen’s base private pharma business has grown 16% by value
• Organic and new product launches
• Trust in the Aspen brand
• Aspen highly rated by Managed Healthcare Funders and Providers as well as GP’s
• Target market getting focus
• Aspen has the best people
• Preferential procurement legislation favours local manufacturers
• Pharmaceuticals sector designed for local procurement with effect December 2011
• Alignment to BBBEE
• Cost competitiveness due to manufacturing efficiencies
• Global volumes drive down local costs
• Improved public sector opportunities
• Value and relevance of product pipeline
• Serial launch mentality

48

TRUST IN THE ASPEN BRAND

Scripted products in the South African Private Sector

Almost 1 in 4 script lines dispensed in the South African private market continues to be for an Aspen product

Number of script lines 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000

Aspen / GSK Adcock Cipla Novartis Ranbaxy J&J Sanofi Pfizer Bayer Pharma Dynamics Merck Astra Servier Ingelheim Pharmafrica Mylan Reckitt Benckiser Novo-Nordisk Inova Thebe MSD Wyeth SA Roche

Manufacturer Scripts % Share

Aspen / GSK 31,462,970 24% Adcock 21,485,810 16% Cipla 8,794,958 7% Novartis 7,563,649 6% Ranbaxy 4,619,830 4% J&J 3,968,696 3% Sanofi 3,892,056 3% Pfizer 3,852,996 3% Bayer 3,372,742 3% Pharma Dynamics 3,133,191 2% Merck 2,745,816 2% Astra 2,462,438 2% Servier 2,140,213 2% Ingelheim 1,725,160 1% Pharmafrica 1,618,238 1% Mylan 1,439,291 1% Reckitt Benckiser 1,437,179 1% Novo-Nordisk 1,436,791 1% Inova 1,421,763 1% Thebe 1,164,618 1% MSD 1,161,063 1% Wyeth SA 997,472 1% Roche 923,059 1%

49

PREFERENTIAL PROCUREMENT (PP)

• Current PP legislation has little or no alignment to BEE or local production
• This has often benefited imports over local production
• Public listed companies enjoyed no procurement benefit or empowerment credentials
• Regulations amended on 8 June 2011 and become effective on 7 December 2011
• Certain sectors and products designated to local procurement
• Pharmaceuticals will be designated
• Designated tenders / products will be set aside for local production according to local content
• Public procurement will be aligned to BEE scorecard

This will improve the quantum of local procurement, level playing fields for listed entities, reward those companies with superior BEE credentials and provide greater certainty on tender volumes

50

ASPEN’S MANUFACTURING COMPETITIVE ADVANTAGES

• Aspen’s strength lies in its ability to supply complexity and high volumes of products

reliably and cost competitively

• Manufacturing capabilities at the Port Elizabeth and East London facilities have been

rationalised

• Homogenous products types are produced at designated facilities
• Manufacturing capacity in the tabletting can be nearly trebled with only a small

increase in incremental variable costs

• Sufficient manufacturing capacity exists to produce required volumes for the domestic

and international market as well as to accommodate the introduction of international brands Manufacturing Capacity & Capability is aligned to the Group’s Growth Strategy

51

PROSPECTS IN SOLIDS MANUFACTURING

• Approximately 4 billion tablets have been identified for transfer into Port Elizabeth
• ver time
• Transfer of these products to Port Elizabeth will mean
• Economies of scale will be further improved
• Savings on conversion 50% - 90% versus existing sources
• Global product cost savings for 2012

alone budgeted at over $10 million

• Sustained savings stream expected until 2015
• Cost efficiencies through economies of scale

benefits expected over the next 5 -7 years

• Off shore volumes > domestic volumes

Globally competitive manufacture and procurement is facilitating acquisitive opportunities e.g. Sigma and global brands Port Elizabeth

International 13% Domestic 87%

Current allocation of capacity

52

COST COMPETITIVENESS

Aspen in the South African Public Sector

2010 ARV Tender 2009 Solid Dosage Tender

A decade of Public Sector service leadership

Aspen 41% Sonke 22% Cipla Medpro 10% Abbott 10% Cipla 5% Adcock 4% Strides 4% Aurobindo 3% Specpharm 1% MSD 0% Aspen 30% Other 25% Multinationals 19% Biogaran 5% Gulf Drug 4% Cipla 3% Daiichi Sankyo 3% Adcock 3% Biotech 2% Pharmachem 2% Sandoz 2% Dezzo 2% Aspen 24% Sanofi 18% Dezzo 15% Pharmachem 7% Be-Tabs 6% Sandoz 6% Merck 6% Fresenius Kabi 3% Ranbaxy 3% Astra Zeneca 3% Other 9%

2011 TB & Antibiotics

Infacare 1 Infacare 2 Melegi Acidified Infacare Soya 1 Infacare Soya 2 Infacare Nurture Infacare Anti-reflux

2011 Infant Nutritionals Tender – RT 9/01

Aspen won 100% of all powdered formulations on all tender categories in which Aspen participated. Gauteng still needs to be awarded

53

NEW PRODUCT LAUNCHES – JUNE 2011

Value and Number of New Product Launches per Company

17 10 4 5 4 4 7 2 1 2 Value of Products Launched 0-12 months

• No. of Products launched 0-12 months

54

SUB-SAHARAN AFRICA

• Robust demand
• Rolling out more representation
• Support growing generic business
• Reps into Nigeria
• Dossier progress
• Dispatched 334 of 813
• 73 of the above for Nigeria, Kenya and Ghana
• Started receiving registrations - launches expected from January 2012 include
• Carvedilol and Rosuvastatin – Nigeria
• Metformin ER in Ghana
• Restructuring paying dividends
• Reliance on the public sector has been reduced significantly
• Tender business from 41% to 24% in 2011
• Growth in the private sector business through focussed promotional efforts and new product launches
• Private market sales increased by 37% in 2011
• Export business has grown to represent approximately 10% of Shelys Africa revenue

Sales for the region R1.3bn and operating income at

• R178m. Nearly 80% of sales

through the Collaboration Africa is growing and pioneering now paying dividends Now the leading pharma company in Sub-Saharan Africa

55

THE ASPEN DNA - TO REST IS TO RUST

“Every morning in Africa a gazelle wakes up. It knows it must move faster than the lion

• r it will not survive. Every morning a lion wakes up and it knows it must move faster

than the slowest gazelle or it will starve. It does not matter if you are the lion or the gazelle, when the sun comes up, you better be moving! Not only are time zones different, but lions are mainly nocturnal – so you need to keep moving night and day. Stay vigilant and be wary of anything that eats while you sleep! Growing our international business has taken a supreme effort and much sacrifice, but the contribution is now here for you all to see

The Aspen DNA per our Australian Team Correction on Aspen DNA from South Africa

56

ASPEN IN ASIA PACIFIC

Growth in Australian Base Business Revenue

ZAR ‘million 7 65 109 235 309 396 509 709 915 1278 3090 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

CAGR % = 84% including Sigma 73% excluding Sigma

Sigma 1302 Base 1701

Other R88m

3091

57

ASPEN IN ASIA PACIFIC

• 2001 start up
• 2011
• Aspen field force rated most effective and highly regarded –

independent survey by Cegedim

• Anticipated annualised sales over $700 million
• 800 employees
• Asian growth strategy central to region
• Herron brand voted by Readers Digest readers as one of the

pharma industry’s most trusted brands

• Part of our regional infant milk strategy
• Sigma integration is progressing well

Highlights in Australia  1 in 7 scripts for Aspen product  Number 1 by sales volume ex-pharmacy  Number 1 by prescriptions written  Number 7 by sales value

58

ASPEN IN ASIA PACIFIC (includes Sigma)

Rank Manufacturer

• No. of scripts

% Share 1 Aspen Australia 17,947,615 13.92 2 Generic* 15,515,883 12.04 3 GlaxoSmithKline 13,284,020 10.30 4 Sanofi-Aventis 11,662,125 9.05 5 Alphapharm 8,932,342 6.93 6 Pfizer 8,535,945 6.62 7 AstraZeneca 8,085,928 6.27 8 MSD 4,449,315 3.45 9 Boehringer Ingelheim 3,513,038 2.73 10 Servier 3,010,859 2.34 11 Bristolmyer/Squibb 2,639,561 2.05 12 CSL 2,602,198 2.02 13 Mundipharma 2,591,439 2.01 14 Bayer Schering 2,352,647 1.82 15 Roche 2,216,925 1.72 16 Novartis 2,009,080 1.56 17 Wyeth 1,749,989 1.36 18 Janssen Cilag 1,582,680 1.23 19 Solvay Pharm 1,362,457 1.06 20 Others 14,873,294 11.54 Total 128,917,340 100.00

Aspen base business continues to perform. Growth in sales

• f 33% to R1.7 billion

Currently Australia represents majority

• f Asia Pacific sales

Our team that leads >$700 million was the same team that led a $7 million in 2001

Source IMS December 2010 The “A Team”

59

INTEGRATION PROCESS

Manufacturing Sites  Tennyson – Brisbane – closed and sold  Croydon Research Drive – Melbourne – to be closed in H1 2012  Noble Park – Melbourne – phased closure – bulk in 2012 Distribution Sites  Distribution outsourced / transferred or closed  Mansfield / Merrindale in Croydon – transferred to third party

Operational consolidation includes

• Key work streams for integration include
• Operations
• Information Technology
• Sales and Administration
• Procurement

All going according to plan

60

INTEGRATION PROCESS

Quality Assurance & Quality Compliance Croydon QA Noble Park QA Dandenong QA Dandenong Quality Compliance To be consolidated into single entity Quality Control Croydon Noble Park Dandenong Also to be consolidated Other Croydon Head Office 55000m2 site To be closed and sold

61

CONSOLIDATION / INTEGRATION PROCESS

• Leaner business
• Shaped for future competitiveness
• Manufacture concentrated at Dandenong in Melbourne
• Will meet all stringent regulatory requirements
• Central to strategy for roll out of quality product into

Asia Pacific

• Japanese requirements challenging
• Improved focus to the business
• Outsource manufacture / distribution options means business now focussed on harnessing commercial

strengths

• Local manufacturing opportunities include
• Liquids / creams
• Consumer / OTC
• Made in Australia
• Local packing
• Manufacture for Asia including Japan

Sustainable business model

62

ASPEN IN ASIA PACIFIC

• Australia has outperformed the expectations guidance given at the half year results
• 5 months included in 2011
• Basketing strategy to drive sales growth
• One stop shop
• Integration process addressing costs
• Aspen has global leverage
• Aggressive reduction in COG’s
• We acquired $75 million of EBIT
• Target to double this in 2 years
• May get there sooner

Selected individual product cost breakdown R000’s South Africa Sigma Std Savings Variance % Total Ex works 5 522 46 184

• 40 662
• 88%

63

ASPEN IN ASIA PACIFIC

• Australia launch pad for growth into Asia
• Quality well accepted
• Intention is to convert third party structures into Aspen controlled

and managed representation

• Needs critical mass
• A CEO has been appointed for the Philippines
• Marcelina T. Itchon
• 80 - 100 representatives will be employed
• Expect to be online by Q1 2012
• Additional regional territorial roll out to be expected

Asian Roll Out Begins

64

SAD vs SIGMA

The Parallels Comments “When the mouse swallows the elephant it tends to get indigestion” There can only be one result. “They have overpaid. There are no

• bvious synergies.”

Results We acquired R123 million of profit. We doubled it the following year. We had neither scale nor global manufacturing skills Comments “South African companies fail in Australia”. “This one will be a bridge too far for Aspen” Results We are also on track to double. Given our relative base in Australia and global manufacturing skills, the task is easier and the numbers are just that much larger! Great teams – superior results Go you good things!

65

LATIN AMERICA

• Market size R$33 billion ($21 billion)
• 7 times the size of South Africa
• Fragmented
• 60 000 pharmacies and 400 wholesalers
• Market growing at 19%
• High priced market
• Social pyramid shifting annually!

66

LATIN AMERICA

• Foundations finally in place on which to build an Aspen style business
• Appointed highly energetic CEO for Brazil
• Alexandre Franca
• Ex-BMS Executive : Sales & Marketing
• Has Aspen DNA
• Passionate, focussed, decisive and driven
• Cellofarm renamed Aspen
• Business transformed
• 100% Public sector  20% commodities
• Zylpen / Heptron sold to Strides
• Emphasis on brand building and organic pipeline
• Sales growth of 25% achieved
• Acquisitive / partnering opportunities being explored
• Local brands R$12 million acquired

67

LATIN AMERICA

Average price level in Brazil & Mexico higher than in other Pharmerging Markets Average Standard Unit Price – Retail (US$ / Unit)

0.66 0.42 0.40 0.34 0.33 0.32 0.30 0.18 0.28 0.23 0.23 0.08 0.06 0.04 USA Germany Italy France Spain Japan Canada UK Mexico Turkey Brazil Russia South Korea India

Average Price (US$) G8 Pharmerging Source : IMS / MIDAS – QTR April 2009

68

LATIN AMERICA

• Mexico market size US$ 7.7 billion  Aspen ranked 50th
• Venezuela market size US$ 6.2 billion  Aspen ranked 78th
• Consolidated the geography under Mexico
• Simplified supply chain
• Rationalise pack presentations
• Assisted with MOQ
• Markets generally have high prices
• Prefer brands / branded generics
• Opportunities being actively explored for products and partnering
• Organic pipeline sales flow from 2012

Brazil 54% Mexico 24% Venezuela 11% ROLA 11%

Latam Sales R925m

69

SUMMARY & PROSPECTS

• Expect another year of solid growth for Aspen
• Growth drivers largely offshore
• Primarily the Asia Pacific region
• South African business has performed and shown resilience
• Challenges raised at interims blunted
• Patented products and infant milks aggressively defended
• Strong volume growth
• South African prospects
• Relative performance to improve throughout the year
• H1
• Sales negatively impacted by ARV off takes
• Donor effect
• Last year still had full IMF, ARVs and patented products
• Strike
• Organic volume growth from base business
• H2
• ARVs to “normalise”
• Donor stock washout
• Lesser impact on IMF, ARVs and patented products
• Full effect of the IMF tender
• No strike!
• Organic volume growth from base business
• Potential SEP price impact (0% - 4%)

70

SUMMARY & PROSPECTS

• Organic pipeline to retain our leadership position and drive growth
• Opportunity for additional collaborations with multinationals
• Focus on maintaining the underlying pharma base growth rates at the 16% achieved last year
• Growth of this region to drive Group sales numbers through
• Leveraging basket of products
• Roll out of pipeline
• Sigma included for 12 months
• Synergetic savings
• Cost of goods and integration cost savings
• Expect savings over 3 years
• Anticipated aggressive regional roll out
• Philippines to have Aspen representation before financial year end
• Both regions now on track
• Anticipate both organic and inorganic growth
• Markets enjoy strong underlying growth fundamentals
• Classic emerging market make up

71

SUMMARY & PROSPECTS

• Competitive edge that often underpins deal success
• Anticipate increased economies of scale in South African facilities
• Drive improved COGs
• 5- 7 year opportunity
• Organic pipeline strong in all regions
• Strong cash generation
• Reducing debt, scope for additional gearing
• Strong probability of further corporate activity and / or alliances
• Aspen’s expanding regional platform makes us a compelling partnership option for both multinationals

and exporters

• Relative exchange rates – effect local versus offshore component
• Regardless believe offshore component will be larger in 2012
• Anticipate another year of real growth
• Primary drivers are organic
• South African growth blunted by slow ARV off takes
• Sigma to contribute for 12 months
• Inorganic opportunities